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"... A network of people connected by directed ratings or trust scores, and a model for propagating those trust scores, is a fundamental building block in many of today's most successful e-commerce and recommendation systems. In eBay, such a model of trust has significant influence on the price an i ..."

A network of people connected by directed ratings or trust scores, and a model for propagating those trust scores, is a fundamental building block in many of today&apos;s most successful e-commerce and recommendation systems. In eBay, such a model of trust has significant influence on the price an item may command. In Epinions (epinions.com), conclusions drawn from the web of trust are linked to many behaviors of the system, including decisions on items to which each user is exposed. We develop a framework of trust propagation schemes, each of which may be appropriate in certain circumstances, and evaluate the schemes on a large trust network consisting of 800K trust scores expressed among 130K people. We show that a small number of expressed trusts/distrust per individual allows us to predict reliably trust between any two people in the system with high accuracy: a quadratic increase in actionable information. Our work appears to be the first to incorporate distrust in a computational trust propagation setting.

...trustworthy manner [4], placing positive pressure on the evolving social constructs of the web. Indeed, social network theory and economics have considered a variety of facets of this general subject =-=[1, 2, 3, 6, 25]-=-. 1.2 Introducing distrust Recent works [14, 21] give a mathematical approach to the propagation of trust, but do not extend to the case in which users may also express distrust. However, experience w...

"... While most people claim to be very concerned about their privacy, they do not consistently take actions to protect it. Web retailers detail their information practices in their privacy policies, but most of the time this information remains invisible to consumers. This paper reports on research unde ..."

While most people claim to be very concerned about their privacy, they do not consistently take actions to protect it. Web retailers detail their information practices in their privacy policies, but most of the time this information remains invisible to consumers. This paper reports on research undertaken to determine whether a more prominent display of privacy information will cause consumers to incorporate privacy considerations into their online purchasing decisions. We designed an experiment in which a shopping search engine interface, Privacy Finder, clearly displays privacy policy information provided by retailers in a machinereadable format. Privacy Finder annotates search results with a “privacy icon” and a “privacy report.” The privacy icon provides a privacy rating for the retailer on a five-point scale. The privacy report summarizes information contained in traditional privacy policies in a short, concise format. Our research shows that providing accessible privacy information reduces the information asymmetry gap between merchants and consumers. This reduction tends to lead consumers to purchase from online retailers who better protect their privacy. Additionally, our study indicates that once privacy information is made more salient, some consumers are willing to pay a premium to purchase from more privacy protective websites.

"... Is there any need to “clean ” up a banking system in the midst of a crisis, for instance, by closing some weak banks and forcing others to sell bad assets, or can one wait till the crisis is over? We argue that an “overhang ” of impaired banks that may be forced to sell assets in the future can incr ..."

Is there any need to “clean ” up a banking system in the midst of a crisis, for instance, by closing some weak banks and forcing others to sell bad assets, or can one wait till the crisis is over? We argue that an “overhang ” of impaired banks that may be forced to sell assets in the future can increase the private returns to holding illiquid assets sufficiently that weak banks have no interest in selling them. Anticipating a potential future fire sale, cash rich buyers have high expected returns to holding cash, which also reduces their incentive to lock up money in term loans. The potential for a worse fire sale than necessary, as well as the associated decline in credit origination, could make the crisis worse, which is one reason it may make sense to clean up the system even in the midst of the crisis. We discuss alternative ways of cleaning up the system, and the associated costs and benefits.

...expected returns on the instruments available. In addition, information asymmetry between buyers and sellers in the capital market means that there is the possibility of being perceived as a “lemon” (=-=Ackerlof, 1970-=-). Sellers make disclosures to 7 Choi and Levich (1990) reported German and Japanese preparers’ comments that they attempted to provide extra information to overcome accounting diversity. 8 The harmon...

"... This paper explores the link between information flows and governance or institutional quality. Economic theory expounds on the importance of information on economic outcomes either through its direct effect on prices and quantities or through its effect on other factors such as institutions and the ..."

This paper explores the link between information flows and governance or institutional quality. Economic theory expounds on the importance of information on economic outcomes either through its direct effect on prices and quantities or through its effect on other factors such as institutions and the quality of governance. This paper shows that countries with better information flows also govern better. The indicators used to assess better information flows are of two kinds. One index is based on the existence of freedom of information laws. A second index is constructed called the &quot;transparency&quot; index which measures the frequency with which economic data are published in countries around the world. Empirical analysis shows that countries which have better information flows as measured by both indicators have better quality governance.

"... ABSTRACT. Information economics provides important tools to articulate an economics analysis of the governance mechanisms for the generation and exploitation of localized technological knowledge. A variety of hybrid forms of knowledge governance ranging from coordinated transactions and constructed ..."

ABSTRACT. Information economics provides important tools to articulate an economics analysis of the governance mechanisms for the generation and exploitation of localized technological knowledge. A variety of hybrid forms of knowledge governance ranging from coordinated transactions and constructed interactions to quasi-hierarchies can be found between the two unrealistic extremes of pure markets and pure organizations. The notion of localized technological knowledge as a highly heterogeneous dynamic process characterized by varying levels of appropriability, tacitness, unpredictability and indivisibility, which take the forms of complementarity and modularity, cumulability, compositeness, fungeability, helps to grasp the logic behind the variety of knowledge governance mechanisms at work. The analysis of transaction, agency and communication costs provides basic guidance to elaborate an integrated framework able to understand the matching between types of knowledge and modes and mechanisms of knowledge governance both in generation and exploitation.

"... Servicizing, a novel business practice that sells product functionality rather than products, has been touted as an environmentally beneficial business practice. This paper applies insights from transaction cost economics (TCE) to describe how servicizing transactions mitigate some problems associat ..."

Servicizing, a novel business practice that sells product functionality rather than products, has been touted as an environmentally beneficial business practice. This paper applies insights from transaction cost economics (TCE) to describe how servicizing transactions mitigate some problems associated with sales transactions, while creating several others. Servicizing’s success requires manufacturers to develop contracts that attract customers while protecting their interests. To facilitate empirical testing of the concepts discussed, several propositions are offered.

"... Is there any need to “clean ” up a banking system in the midst of a crisis, by closing or recapitalizing weak banks and taking bad assets off bank balance sheets, or can one wait till the crisis is over? We argue that an “overhang ” of impaired banks that may be forced to sell assets soon can reduce ..."

Is there any need to “clean ” up a banking system in the midst of a crisis, by closing or recapitalizing weak banks and taking bad assets off bank balance sheets, or can one wait till the crisis is over? We argue that an “overhang ” of impaired banks that may be forced to sell assets soon can reduce the current price of illiquid assets sufficiently that weak banks have no interest in selling them. Anticipating a potential future fire sale, cash rich buyers have high expected returns to holding cash, which also reduces their incentive to lock up money in term loans. The potential for a worse fire sale than necessary, as well as the associated decline in credit origination, could make the crisis worse, which is one reason it may make sense to clean up the system even in the midst of the crisis. We discuss alternative ways of cleaning up the system, and the associated costs and benefits.

The accounting standardization project, kicked off by the passage of US securities laws in the 1930s, has steadily gained momentum over seven decades. Today, written standards dominate accounting thought, practice, regulation, instruction, even research. Generally accepted accounting principles—originally a mere description in its plain English meaning—have since been capitalized into a proper name—Generally Accepted Accounting Principles—and the phrase now describes rules and regulations issued by authorities with power to inflict punishment on those who do not choose to accept them. How and why did financial reporting get caught in the standardization project, replacing social norms of corporate and professional behavior by written rules and standards? What are the consequences of this transformation? What alternative courses are available to accounting and corporate governance? I argue that heavy reliance on the codification of financial reporting has been a wrong path. A shift from rules towards norms of behavior may yet help accounting and corporate governance recover a better balance.

...tate Bar of Arizona, 433 US 350, 1977). The quality of audit services being practically unobservable to shareholders, the market for audit services is a textbook example of a ‘market for lemons’ (see =-=Ackerlof, 1970-=-). Application of the general theory (that competition promotes economic efficiency) to the audit industry led to a sharp decline in the price of audit services in the early eighties. This was followe...